A chemical company has to pay for past and future cleanups of cancer-causing dioxin from the Passaic River — a cost that could reach hundreds of millions of dollars — following a six-year legal battle with the state.

Occidental Chemical Corp. of Dallas was found liable for all removal costs of hazardous waste that came from the former Diamond Shamrock plant in Newark. That plant manufactured Agent Orange from 1951 to 1969 and dumped its byproduct, dioxin, into the river. Incoming tides could have spread the contamination as far upriver as the Dundee Dam between Garfield and Clifton. Dioxin concentrations in fish and crabs in the Passaic River are among the highest reported in the world.

The preliminary ruling by Superior Court Judge Sebastian Lombardi in Newark did not award money, but New Jersey officials said it could cost Occidental hundreds of millions of dollars considering a full cleanup of the river is estimated at $2.3 billion. The state has already spent $120 million cleaning the river — and the first major cleanup, which will cost $80 million — is just beginning.

The ruling is the first in a long and complex legal battle that pitted the state Department of Environmental Protection against several companies that inherited Diamond Shamrock's liability, including Occidental, Tierra Solutions Inc. and Maxus Energy Corp.

It began in late 2005 when former DEP Commissioner Bradley Campbell filed a lawsuit seeking to have the companies pay three times whatever the cost of a cleanup would be as a penalty for not acting fast enough to deal with the pollution.

Critics of the lawsuit, including Ella Filippone of the Passaic River Coalition and Rep. Bill Pascrell Jr., D-Paterson, have said that the suit has stalled progress. Other environmental groups, including the NY/NJ Baykeeper and the Sierra Club, support it.

In 2008, Tierra and Maxus filed a countersuit claiming 300 other parties — including more than 70 municipalities — bear some of the responsibility for polluting the waterway.

The companies argued that they are shouldering too much of the burden to clean up the lower portion of the Passaic.

Lombardi is expected to rule on Tierra's liability on Aug. 24.

An Occidental spokesman said the DEP has blown Lombardi's ruling out of proportion.

"The judge did not hold OxyChem [Occidental] liable for damages in any amount in his ruling," said Eric Moses, a company spokesman.

"In fact, the judge acknowledged he was not entering any judgment on liability at this time."

Occidental never owned or operated the plant on Lister Avenue in Newark because it was closed before Occidental's purchase of Diamond Shamrock Chemical Co., Moses said.

The plant was also known as Diamond Alkali.

Michael Turner, a spokesman for Tierra, said the Occidental ruling was "just one development in a case that will likely last years. It remains to be seen how successful the state will be."

Representatives for the companies have criticized the state for paying $28 million on outside lawyers' fees and experts. A DEP spokesman said it is money well spent, considering dredging dioxin from Newark Bay to Dundee Dam could cost $2.3 billion, according to the EPA.

"This is good use of taxpayer money because of the resources that this litigation demands and the expertise it requires," said Larry Hajna, a DEP spokesman.

"The state could have potentially faced very significant costs toward the cleanup if the defendants were not held liable under the Spill Act."

Preparation for the first major cleanup is under way. That work will remove 200,000 cubic yards of the most highly contaminated sediment from the river's bottom right in front of the plant.

The EPA expects to begin drilling into the Passaic River's bottom next week to install a floodwall and support structures. From the summer through November, the EPA plans to build a sheet pile wall in the river so contaminated sediment doesn't escape to other parts of the waterway when it is scooped up by heavy equipment.

The EPA is also going to build a facility at 117 Blanchard St. by December to separate and clean water from the contaminated sediment.